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[Yanolja Research Insights] Vol.10 The Direction Ahead for Pricing RM in the Hotel Industry

In an industry as dynamic as hospitality, pricing strategies are at the heart of revenue success. Yanolja Research Insights Vol.10 explores the evolving landscape of Pricing Revenue Management (RM) and offers key takeaways on how technology, data, and strategic decision-making are shaping the future of hotel pricing. Here are the key highlights:

Why Pricing RM Matters More Than Ever

  • The hotel industry faces increasing competition from alternative lodging services and diverse booking channels.

  • Traditional revenue management, relying solely on human expertise, is becoming insufficient due to evolving market dynamics.

  • Pricing RM is now a data-driven process that maximizes revenue by determining optimal room rates based on demand forecasting and competitor analysis.


How Hotels Are Implementing Pricing RM

Hotels are leveraging different methods to determine room pricing based on their size, resources, and technological adoption:

  • Internal Revenue Management Systems (RMS): Large hotel chains like Marriott and IHG use proprietary RMS to integrate pricing strategies with property management systems.

  • External RMS Solutions: Many hotels rely on third-party tools like IDeaS and Duetto, which use AI-driven dynamic pricing, demand forecasting, and competitor analysis.

  • Heuristic-Based Pricing: Smaller hotels without RMS rely on manual price adjustments, often benchmarking against competitors or market trends.


Challenges in Pricing RM Adoption

Despite the availability of advanced tools, implementing effective Pricing RM strategies is not without hurdles:

  • Limited Customization: External RMS solutions may not fully accommodate unique hotel attributes or sudden market shifts.

  • Cost Constraints: Many smaller hotels struggle with the expenses of RMS subscriptions or hiring revenue managers.

  • Performance Validation: Hotels using RMS often lack clear metrics to assess whether automated pricing truly maximizes revenue.


Future Directions: AI and the Evolution of Pricing RM

  • Generative AI and Machine Learning are poised to revolutionize RM by improving price prediction accuracy and enabling real-time adjustments.

  • The industry is shifting towards tech-driven third-party solutions, where hotels will subscribe to external services rather than managing pricing in-house.

  • Increased adoption of AI-based RMS will create a self-reinforcing cycle, driving down service costs while enhancing pricing precision.


Stay Ahead in the Evolving RM Landscape

The hotel industry is at a turning point where data, automation, and AI-driven insights are redefining revenue management. Want to dive deeper into these transformative trends?

Explore the full report on the Yanolja Research website and stay ahead of the future of hotel pricing!

Yanolja Research Insights Vol.10

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Location: Seoul, Korea

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